What Is Open Banking and How Can Postman Help?

Jordan Walsh

March 22, 2022

Sunday, February 6, 2022 marked two years since the launch of the Consumer Data Right (CDR) Rules in Australia. This seemingly small launch was part of a much bigger change—not just for Australian banks, but for banks and financial services organizations all around the world.

The big change? Giving consumers more open access to their banking data.

In Australia it’s called the CDR, in Europe it’s PSD2, and in the US it’s the Financial Data Exchange (FDX). Several other countries have their own versions. Whatever you call it, governments and banks around the world have spent the past few years embarking on an exciting journey to provide consumers with much easier and more open access to their banking information, and it’s all powered by APIs. This is open banking.

What is open banking?

“Open banking” is the general term for banks providing simpler and standardized access to consumers’ financial information. For a long time, banks have provided a way for consumers to view and manage their data through internet banking and mobile applications. But it has always been difficult for consumers to share this information securely and automatically with the third-party services they are interacting with.

Open banking changes that. It provides a straightforward way for consumers to share their financial information with other banks and financial services organizations if and when they choose to.

What does open banking do for you?

For the consumer, opening up your banking information can help identify improved products and services that are more relevant to you. This may be something as simple as getting a better mortgage interest rate or simplifying the process of getting a credit card, or it could even go as far as analyzing your spending patterns to identify ways to save money and achieve your financial goals.

For banks, having open banking APIs creates a competitive advantage by being able to offer the most targeted products and services to consumers. It also provides new revenue streams through partnerships with fintech (financial technology) organizations to create brand-new customer experiences. These partnerships give consumers the freedom to choose the products they want to use while having the safety and security of banking with known and trusted brands.

For fintechs, having trusted and permitted access to consumers’ financial data allows them to create a broad range of new and innovative products and services. From accounting software to payments platforms, the trend of open banking APIs is a wave of change in the financial industry that has been long needed. Applications like Plaid are a great example of how open banking APIs can be leveraged to provide a single view of accounts from different providers in a single, streamlined user interface.

I’m a consumer, how can I use open banking?

Banks may provide an open API portal or website for you to view their APIs, read the documentation, and gain access to send requests. However, as a consumer, you generally won’t have direct access to the consumer-related APIs the banks are providing. In most cases, you are required to register as an accredited third party in order to access the open banking data.

Instead, you can choose a bank that has a published policy around open banking. In Australia, all banks were required to have open banking APIs in place by the end of 2021. But it’s a different story around the world.

Each country has its own levels of governance, support, and standards for rolling out open banking APIs. You should search your bank’s website and see if you can find their policies on open banking, and choose to support the banks that have a program in place. Postman has published a public workspace of open banking APIs from Australian banks. There is also a PSD2 public workspace and emerging content around the US FDX standards.

I work at a bank, how can Postman support me?

Postman is a big supporter of open banking initiatives around the world. We want the Postman API Platform to be the go-to place for developers of open banking APIs globally to create great experiences for your customers.

Our API platform provides you with full API lifecycle support. From design and development, all the way through to testing, publishing, and monitoring, Postman provides everything you need to launch your APIs five times faster.

Also, with Postman’s growing community of more than 17 million developers, we can support your API program through promotion, visibility in our Public API Network, and simplification of the experience for your API consumers.

• Collaboration: The Postman API Platform provides built-in collaboration capabilities that allow your engineers to seamlessly work together to build high-quality APIs and surface these to your customers.

• Testing and quality assurance: The Postman API Platform provides automated testing and mocking capabilities to allow your testing teams to perform all of the unit, security, performance, and contract testing needed to ensure your API products are launched with no bugs.

• Documentation: The Postman API Platform provides an easy way to share your open banking API documentation with both accredited third parties and the general public. API consumers can browse your documentation, and then fork your APIs to use them all within the Postman API Platform—providing them an excellent customer experience.

• Compliance and regulation: The Postman API Platform allows you to share your APIs with regulatory authorities that are ensuring you are meeting the standards. You can share your API definitions, your tests, and even your responses in an open and transparent way to make sure you’re meeting all of your compliance obligations.

How do I get started?

There are already a few open banking APIs in the Public API Network for you to fork and use, and we plan to publish many more that we find along the way:

• UK Public Banking public workspace
• Payment Services Directive (PSD2) public workspace
• Open Banking Australia (CDR)

If you work for a bank, go ahead and publish your open banking APIs on the Public API Network for others to use too. If you don’t have any open banking APIs yet and are interested in getting started, reach out to our team for a helping hand.